Which of the following would require a short hedge?
A) The bank has a positive gap in three months.
B) The bank anticipates receiving the repayment of a $30 million loan in 2 months.The funds will be rolled over immediately.
C) The bank is going to invest a large amount of money in Treasury bills.
D) The bank has a negative duration gap.
E) The bank plans to roll variable-rate CDs over into fixed-rate CDs.
Correct Answer:
Verified
Q20: When you wish to own the underlying
Q22: A cross hedge often has greater risk
Q22: What is a macrohedge?
A) It is a
Q23: An investor anticipates she will have funds
Q24: What is a microhedge?
A) It is a
Q25: In an interest rate swap, the notional
Q27: The value of a basis point for
Q27: Which of the following is not an
Q29: Most interest rate swaps are set up
Q29: Swap participants are subject to:
A)margin requirements.
B)Federal Reserve
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents